Gold price eases from six-week high ahead of Fed chair confirmation

New York (Nov 28)  Gold eased back on Tuesday from the previous day's six-week high as the dollar edged up ahead of
a confirmation hearing for U.S. Federal Reserve chair nominee Jerome Powell.

In prepared remarks for the hearing released by the Fed on Monday, Powell defended the Fed's use of its crisis-fighting
powers, suggesting a broad extension of current Chair Janet Yellen's stance on monetary policy.             

However, there is some risk around the event which is supporting the dollar after its slide to two-month lows on Monday, analysts said.      

Spot gold was down 0.1 percent at $1,293.21 an ounce at 1105 GMT, having hit a peak of $1,299.13 on Monday, its
highest since mid-October. U.S. gold futures for December delivery were down $1.60 an ounce at $1,292.80.

The dollar index was 0.2 percent higher against a currency basket. "The dollar was under pressure yesterday, but we've seen
some recovery dollar-wise, and that has been weighing on gold," ABN Amro analyst Georgette Boele said. "We have Yellen and the
hearing of Powell, so (traders) are a bit cautious."

Powell is seen as likely to continue with policies put in place by Yellen, she added. "He will likely continue to hike
interest rates at a modest pace," she said.
    The Fed's ultra-low interest rate policy has been a key
factor supporting gold over the last decade. Low rates cut the
opportunity cost of holding non-yielding assets such as bullion,
while depressing the dollar, in which it is priced.
    The U.S. currency has also been weighed down in recent days
by worries about delays in the implementation of U.S. tax cuts.
    President Donald Trump's drive to overhaul the U.S. tax code
headed toward a new drama on Tuesday in the Senate, where a pair
of Republican lawmakers demanded changes to the party's tax bill
in exchange for their help in moving it forward.            
    Among other precious metals, silver was down 0.1
percent at $17.01 an ounce, while platinum was 0.2
percent lower at $945.50 and palladium was down 0.6
percent at $1,001.05.
    Platinum has broadly maintained a historically unusual
discount to its sister metal palladium since late September.
    Platinum looks oversold, HSBC said in a note on Monday, as
greater investor and jewellery demand has the potential to
support prices, while concerns over demand from carmakers, which
use the metal in catalytic converters, may be exaggerated.
    Palladium has surged on structural deficits caused by
limited mine supply and good auto demand, it added, but its
rally is vulnerable to profit taking.
    "Investor demand has figured prominently in the rally and
any reduction in this interest may lead to corrections as
speculative investors take profits," it said.

Reuters